Fuel price gap has residents, businesses clamoring for natural gas

Gabor Degre | BDN

Gabor Degre | BDN

Andy Mooney, a foreman with the Ypsilanti, Michigan-based InfraSource, cuts tape from a 2-inch gas line they were laying on Norway Road in Bangor. "Depending on the conditions, we can lay 500-1,000 feet of line in a day," said Mooney. The lines are being installed for Bangor Natural Gas Company.

VEAZIE, Maine — Last year, Veazie Congregational Church was struggling to pay its bills.

The small church, with about 40 members, tried to cut its energy and heating costs by weatherizing the building and installing energy-efficient lights, but that wasn’t helping much because the boiler was running at about 80 percent efficiency.

“There was no place left to cut, none,” said Allen Suddy, a trustee at the church.

Putting aside $5,000 for heating oil each year was too costly for a building that was open only one day per week, so church leaders decided the only thing that would save them real money would be to change their entire heating system, Suddy said.

The church decided to install a new $12,000 furnace and hook up to the natural gas line running underneath U.S. Route 2.

“We figured that with the price of natural gas, we could pay the thing off in three or four years through the savings,” Suddy said.

This year, Veazie Congregational Church should have a natural gas bill between $2,000 and $2,500, according to Suddy.

“We’re calling this the end of an era for our church on oil,” he said.

The church will use some of the money it has saved in the switch to paint the ceilings and walls and put in new doors, Suddy said.

More and more homes and businesses in the Bangor area are following suit.

Bangor Gas expects more than 1,000 buildings to switch to natural gas this year. The company will install more than 60,000 feet of pipe under city streets during projects in Bangor, Old Town, Orono and Brewer, according to Jonathan Kunz, marketing and sales manager for Bangor Gas.

This growth adds to the nearly 140 miles of natural gas lines Bangor Gas already operates.

Projects are under way to add the University of Maine Augusta Bangor campus and part of the Air National Guard base to the system. Crews are installing lines on Odlin Road, Pearl and Center streets and about 20 other roadways this year.

“Our crews can usually do a street in a couple of days,” Kunz said.

With fuel oil prices running around $3.60 per gallon and the natural gas equivalent around $1.26 for residential buildings and $1.15 for commercial, residents and businesses are clamoring to have lines installed under their streets, Kunz said.

But investing thousands of dollars in a new heating system might not pay off over the long term, according to Mike Shea, president and CEO at Webber Energy.

“Putting all your eggs in one basket is a tough decision,” Shea said.

While much of Webber’s business involves oil, the company has been installing more new heating systems for customers switching to natural gas, including Veazie Congregational Church.

“Natural gas is a competitor to us, but they have the price advantage, Shea said. “We had it for years, too.”

Shea questioned whether natural gas will stay significantly cheaper than oil for more than a few years. A 30- or 40-year commitment to a natural gas heating system could be risky because fuel prices, supply and demand fluctuate so much, he said.

“The energy markets have been very volatile in the past couple years,” he said. ”History has shown that there’s no clear winner or loser in the costs. The [phenomenon] of natural gas being significantly cheaper than home heating oil is only a couple years old.”

In a few more years, oil prices might be competitive with natural gas again, he said.

Kunz has more confidence in the stability of natural gas prices.

“The big thing is that it’s a domestic product,” he said. “They’re saying that there are over 100 years of reserves.”

While natural gas is the cleanest-burning fossil fuel, Kunz said, it’s not a permanent answer to energy production. Clean energy is still the end goal.